New investors in the foreign exchange market are often in need of powerful and innovative tools to exstensively test their trading strategy before risking large sums of money in this unpredictable market. Forex Tester lets users do this in a very convenient and time-saving way.
This piece of software is a simulator that runs on historical data and allows its users to create a demo account with any given leverage and spread settings to match the conditions of their own online broker.
Forex Tester Pros
Once everything is set up, users can choose in which time frame they wish to trade and generate ticks for a certain group of currency pairs. Once the process is completed, there is a wide variety of oscillators, indicators and other tools to help decide when to enter or exit a trade and test new strategies in a very realistic environment.
One of the best features of this software is the ability to fast-forward in time, which is very useful to see the outcome of inter-day trades without having to wait days or even weeks for the trade to close.
The historical data is freely available and can be downloaded and loaded and imported into the program in a variety of formats, including CVS (Comma Separated Values), HST (Metatrader 4 history format) or plain text.
In a way, Forex Tester can be a very valuable tool as the demo account feature — which updates your balance based on the outcome of your trades — prompts users to improve not only their trading strategies, but also their money management rules to become successful in the long and not just in the short term. However, one should keep in mind that this kind of testing has also severe, but sometimes subtle limitations.
Forex Tester Cons
The main disadvantage of Forex Tester is its relatively high price, currently set to $100 for its 'lite version' and $135 for its full version, which allows users to save and reload account data and use an API to fully automate the testing process.
Moreover, like in demo accounts offered by many online brokers in order to familiarize users with their investing interface, the use of virtual money — usually even a large amount of it — together with the ability to fast-forward in time tends not to reflect the real array of contrasting emotions going through the mind of any investor working on their own money: earning money with Forex Tester may therefore sound much easier than in a real-life situation, since emotion tends to play a dominant role in all trades.
To sum up, Forex Tester is a useful tester for the foreign exchange market offering unique features and helping investor testing new strategies: however, its relatively high cost makes it advantageous only for those who plan on investing medium to large sums of money, and users should always keep in mind that fast-forwarding in time to test their strategy is generally a double-edge sword.
